Employers have responded angrily to the government’s plans to press ahead with a new scheme to recover NHS costs related to workplace accident or illness through the employers’ liability compulsory insurance (ELCI) system, arguing that it will penalise all employers for the poor performance of a few, and that its introduction would be inappropriate until the Office of Fair Trading (OFT) had concluded its recently announced review of liability insurance.
EEF, the manufacturers’ organisation, was responding to the Department of Health’s consultation on the recovery of NHS costs, which closes today (17 December). The EEF argues that by using ELCI as the pool from which to refund NHS costs, the government’s approach remains fundamentally flawed. The compulsory nature of ELCI means that all employers, even those with the best health and safety records, will effectively be forced to subsidise those with the worst.
The government originally planned to introduce the scheme (now set to begin in April 2005) in late 2003, but this was delayed to take account of the government’s review of employers’ liability compulsory insurance (ELCI). EEF is urging that the scheme be delayed further until the market has stabilised and at least until the OFT has completed its current review.
A recent survey by EEF showed that government and insurance industry efforts to tackle rising costs and inefficiencies in ELCI have proved inadequate, with companies still finding, on average, premium rises of 23%. The majority (80%) of firms with externally verified health and safety management systems found that this had no impact on their premium costs.
Gary Booton, EEF Director of Health, Safety and Environment said:
"We have no argument with the ‘polluter pays’ principle which lies behind these regulations, simply we challenge whether this can actually be achieved with the current proposals. By recovering costs from the insurance pool into which all employers are compelled to pay, the government is letting negligent bosses off the hook and forcing those with good health and safety records to subsidise the worst."
However, the EEF welcomes what it sees as two significant improvements on the government’s original proposals, namely that recovery of NHS costs associated with occupational diseases will be outside the scope of the rules and that contributory negligence can be taken into account.
Many forms of occupational ill health can be made significantly worse by an individual's lifestyle choices, for instance, the increased risk of lung cancer amongst those who are exposed to asbestos and who also choose to smoke. This would be particularly difficult to take into account when apportioning responsibility for future costs.
Equally the EEF believes that contributory negligence is a very common feature of claims arising from industrial accident cases. However, the EEF’s response calls for a less restrictive route for apportioning responsibility than currently proposed, instead opting for a simple letter of agreement between the parties involved in compensation.